RSS
Saskatoon, Saskatchewan, Canada, December 11, 1997
Cameco Corporation, Cogema, and Nukem Inc. today confirm that discussions with the Russian Federation Ministry of Atomic Energy (MINATOM) concerning the uranium derived from the Russian highly enriched uranium (HEU) have been suspended.
The parties have been unable to agree upon a structure which would provide the western companies with the assurance contemplated in the agreement in principle signed on August 18, 1997 that the final agreement will be carried out in accordance with the principles established in the 1993 US and Russian government to government agreement.
The western companies have consistently refused to expose themselves financially or otherwise to the risks inherent in the alternative structures that have been advanced by the Russian representatives of Global Nuclear Services and Supply (GNSS) and Techsnabexport (TENEX). Both of these companies are affiliated with, and partially owned by, MINATOM.
Since the uranium is owned by the Russian state and the agreement contemplated a 10-year term, the western companies needed a number of assurances, including that the agreement would be enforceable for the full contract term and that it had the official sanction of the Russian government. The positions taken by the Russian companies, including a recent change in the selling parties, made the above objectives unattainable.
Regrettably, this impasse could not be resolved and the negotiations have been suspended. Reports indicate that MINATOM intends to market the uranium on its own through GNSS and TENEX and sell the material at floor prices above the average of world market prices.
This uranium continues to be subject to trade restrictions and policies-limiting the volumes that can be sold in the United States and Europe.
The uranium derived from the dismantlement of nuclear weapons has long been accounted for in the supply/demand projections of the western world's uranium industry. The western partners believe this material can be incorporated in the market in a non-disruptive fashion.
After four years of discussions with MINATOM, the western companies offered to pay a fair value (at least $150 million annually beginning in 1997) to the Russian government for this uranium at a time when its salability in the west is restricted by law and policy. At the same time, the western companies sought to enhance the presence of MINATOM in the world's nuclear fuel market and assist in the return of a significant portion of the uranium feed component to Russia for domestic needs.
Notwithstanding the current impasse, the western companies remain willing to resume serious negotiations with representatives of MINATOM as soon the western companies' concerns are addressed to their satisfaction.
Cameco, with its head office in Saskatoon, Saskatchewan, is the world's largest publicly traded uranium company and a growing gold producer. Its uranium products are used to generate electricity in nuclear power plants around the world, providing one of the cleanest sources of energy available today.
For further information, please contact:
| Alice Wong Director, Investor & Corporate Relations Cameco Corporation Phone: (306) 956-6337 Fax: (306) 956-6318 |
Elaine Kergoat Manager, Media & Public Relations Cameco Corporation Phone: (306) 956-6315 Fax: (306) 956-6318 |